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• Translator's Preface
• Section I.: Preliminary Observations.
• Chapter I.: The Question Stated
• Chapter II.: Preliminary Observations On the Rise of Prices Which Has Characterised the Last Few Years.
• Section II.: An Appeal to Some of the Fundamental Notions Upon the Nature and Characteristics of Money.
• Chapter I.: What We Ought to Understand By Value and Price.—twofold Definition of Money.—the Standard Or Fineness of Money.
• Chapter II.: Of the Meaning of the Word Standard.— the Metal-standard Is That From Which Is Derived the Monetary Unit.—the Two Ideas Standard and Monetary Unit Imply Each the Other.
• Chapter III.: Of the Character of Exchanges As Affected By the Invention of Money —how the Rise and Fall of the Precious Metals Are Manifested In the Course of Trade.—phenomena of the Rise and Fall In Commodities.
• Chapter IV.: On the Possibility of Conferring the Quality of Standard Upon Two Metals At Once.
• Chapter V: Of the Meaning of Certain Words Specially Applicable to Money and the Precious Metals.—price, Value, Premium, Dearness, Cheapness
• Section III.: Of the Present Production of Gold and Its Outlet.
• Chapter I.: Of the Increase In the Present Production of Gold As Compared With the Past —the Extended Coinage of Gold Which Has Followed.
• Chapter II.: Diminished Coinage of Silver In France—gold Is Already At a Discount In Comparison With Silver.
• Chapter III.: Extraordinary Exportation of Silver From the Civilised Countries of the Western World Towards India and China —to What Extent It Is Likely to Continue.
• Chapter IV.: France Serves Temporarily As a Parachute to Retard the Fall of Gold.
• Chapter V.: Whether the Extraordinary Production of Gold Ought to Be Considered As an Ephemeral Accident.—the Crushing of the Quartz Veins —mines In Siberia and Elsewhere.
• Section IV.: On the New Outlet That May Be Expected For the Production of the New Gold Mines, and Whether It Will Be In Proportion to the Extent of This Production.
• Chapter I.: Of the Outlet Afforded By Those Countries Which At Present Have Evidently an Insufficient Proportion of Metal In Their Currencies.
• Chapter II.: Of the Increase of Gold Money Which May Arise From the Development of Business, and the Increase of Population.—of Wear and Tear.—of Hoarding.—of Shipwrecks.
• Chapter III.: On the Employment Which Habits of Luxury May Offer to the Gold of the New Mines.
• Chapter IV.: Conclusion of the Preceding Chapters.—the Fall of Gold Very Probable, If Not Inevitable, In Relation to All Other Commodities.
• Section V.
• Chapters I. to V.: On the Part Assigned to Gold In the Monetary Legislation of France.
• Section VI.: Consequences of the Fall In the Value of Gold.
• Chapter I.: A General Distinction Between Those Private Incomes Which Will, and Those Which Will Not Be Affected. of a Certain Collective Loss Which the People of France Will Suffer.
• Chapter II.: Of the Sufferings and Difficulties Which Will Accompany the Transition.
• Chapter III.: On the Gain Which Would Result to Certain Classes of Persons, and to Society, From the Fall In Gold. the Saving to the State From the Payment of the Dividends On the Public Debt.
• Section VII.: Of the Measures to Be Taken to Avert the Evil Effects of the Fall of Gold.
• Chapter I.: Case of a State Like England, Where Gold Is the Standard, and Where There Is No Other Money But Gold.
• Chapter II.: Case of a State Such As France, Where There Is a Silver Standard, But Also a Gold Currency.
• Chapter III.: The Measure Here Recommended Is a Necessary Complement of the Law of Germinal, Year XI.
• Chapter IV.: On Some Inconveniences Inherent In the Combination, Respecting a Gold Currency, Recommended In This Work.
• Chapter V.: Of a Plan Recommended For Maintaining the Parallel Circulation of Silver and Gold.
• Chapter VI.: Of the Resolutions of a Commission Appointed By the Minister of Finance In Mdccclvii.
• Chapter VII.: Of Various Acts Which the Legislation of the Ancient Regime Upon Money Treated As Crimes, and With Regard to Which Some Persons of Our Day Propose to Establish Penalties. —selecting, and Melting; Trade In Coins; Exportation.
• Chapter VIII.: Of a Different Solution Which Has Been Recommended, and Which Would Consist In the Adoption of a Gold Standard.
• Chapter IX.: Appreciation of the System Which Consists In Adjourning Indefinitely the Legislative Solution.

SECTION III.

of the present production of gold and its outlet.

CHAPTER I.

of the increase in the present production of gold as compared with the past —the extended coinage of gold which has followed.

At the commencement of the century, the quantity of gold yielded by the various countries, whose production flows to the general market of the civilised Western* or Christian States, was about 24,000 kilogrammes† of pure metal (about £3,312,000).

But to arrive at this quantity it is necessary to include the production of several countries which then had but little commercial intercourse with the principal nations of Christendom, as, for instance, the Island of Borneo, and several other localities in the Indian Archipelago. Confining himself to the production of the American continent, of Europe, and of Asiatic Russia, M. von Humboldt calculates that it then amounted to 15,800 kilogrammes,* (£2,180,400.) It is doubtful if the gold which the civilised Christian nations drew from other sources, and especially from Africa, added to this supply a weight of 2,000 kilogrammes (£276,000). We might thus estimate at 18,000 kilogrammes (£2,484,000) the amount of gold which, at the beginning of this century, arrived every year, to augment the metallic wealth of the nations of Christendom. It underwent very little increase until the working of the gold mines of the Oural, and afterwards of those of Siberia, contributed, with the aid of other secondary sources, to swell somewhat suddenly the supply to threefold the above amount. Thus matters stood at the commencement of 1848, when took place the discovery of the rich deposits of California, destined to be so soon followed by a similar event in Australia. At this moment we may estimate, in round numbers, the mass of gold furnished to the Christian States at 275,000 kilogrammes (£37,950,000), if not more. The increase, then, is at the rate of 1 to 15 in the course of forty years, and nearly in the proportion of 1 to 5 since 1848. In silver, on the contrary, there has been but little change. The production, at the beginning of the century, was 900,000 kilogrammes (£7,965,000; at present it is estimated slightly to exceed a million kilogrammes (£8,850,000).

The real revolution which has taken place in the supply of gold may be expressed in another way. The region which, until the discovery of the mines of Siberia, was the chief seat of production for the European nations, I mean the whole continent of America, has. since the first voyage of Columbus down to the discovery of the mines of California, that is to say, during the 356 years which intervened between 1492 and 1848, and inclusive of the gold extracted from silver ore as well as that from the gold mines, only produced 2,910,000 kilogrammes (£401,580,000) of pure metal. At this time the yield being nearly 300,000 kilogrammes (£41,400,000), the civilised world receives of this metal, in a single year, about the tenth part of the total which had been furnished by America from the first departure of Columbus down to 1848.

We might present under another form, perhaps still more striking, the productive power of the new auriferous deposits of California and Australia, by indicating the quantity of metal which a miner extracts in an average day's work. With regard to California, we have the Be-port of Dr. Trask, from which an extract has been given by M. Delesse, Inspector of Mines, in the Annales des Mines, third report of 1856 (5th series, vol. 9th, p. 649).* It is there seen that in 1854, by the labour of eight months, each miner produced a quantity of gold valued at 700 dollars (£140), or about 1,100 grammes of gold. At twenty-five days' work a month, which is certainly an over-estimate, it is an average daily extraction of 5½ grammes of gold, which, at the standard of French money is 19 francs (15s. 10d.) An intelligent officer of the French navy, who, on his return from the second campaign of the Kamtschatka, travelled in the interior of California in 1855, and applied himself to the collection of some exact information, M. Armand Coste, gives the sum of 15 francs as the minimum of what a man can, on the average, gain at the mines, an estimate at least equal to that which I have just quoted from Dr. Trask.

In Australia, the situation of the miner is not less favourable. Thus in 1854, in the district of Ballarat, one of the most productive in the colony of Victoria, which is itself the richest in gold, the ordinary wages of a miner, according to the Parliamentary Eeturn of 1856,* was 30 shillings a day. The sum of 15 shillings is indicated as the minimum in the same document; and these remunerations apply to the wages of a miner, which implies that the average produce of a day's work in gold is superior to the quantity of metal contained in 15 and 30 shillings, for, of course, the capitalist who pays the labourer must have his profit. Hence we shall not exaggerate if we adopt for Australia as for California the sum of 19 francs (15s. 10d.) as the ordinary earnings of the miner. Nineteen francs! In passing, let us remark, what a contrast with the gold-washer of the Rhine, whose day's work yields him gold dust of the value of 1 franc 50c. or 2 francs† (15d. or 20d.), and who still follows the occupation! If then the auriferous regions preserved indefinitely the same richness, the value of gold might fall until the sum of 19 of our present francs in gold (15s. 10d.) was only equal to the ordinary price of a day's labour in California and Australia, after the cost of subsistence and the rate of wages should have there found their permanent level. Now, we are justified in concluding that in California and Australia, the day's labour must gradually be assimilated to the rate which prevails in temperate climates, among the most prosperous nations of Christendom, and which in our day is about five francs (4s. 2d.)‡ It follows that the value of gold might fall till the weight of 5½ grammes of pure metal, representing at present 19 francs (15s. 10d.), might correspond only to the amount of well-being which can in our day be procured for the quantity of metal comprised in five francs. By this calculation the fall would in the end amount to three-fourths, —in other words, to procure the same amount of subsistence as at present, it would be requisite, all other things being equal, to give a quantity of gold greater in the proportion of about four to one. According to this we are still very far from the end of the crisis.

I am far from saying that the fall will not, long before it reaches that point, encounter obstacles which will arrest it. Assuredly it may so happen in the very nature of things, and for example, in the conditions of production. It is a subject on which I will shortly offer some further facts. But, at least, it seems to me quite incontestable that there remains a great margin of depreciation.

As regards the force, nay the violence, with which the new gold is diffusing itself through the monetary system of the civilized world, and particularly that of France, here are some facts which speak in a significant manner:—

During the government of Napoleon I., the coinage of gold amounted to 527 million francs (£21,080,000), or an average of 48 millions per annum (£1,812,000).* Under Louis XVIII., it was a smaller proportion, amounting to a total of 389 million francs (£15,560,000), or an average of 39 millions per annum (£1,560,000). Under Charles X., a great decline is observable; for the whole reign the gold coinage amounted to only 52 million francs (£2,080,000). During the seventeen years of Louis Philippe's reign, gold was only coined to the amount of 215 million francs (£8,600,000), or 12½ millions annually (£500,000). The ascending reaction began to manifest itself in 1848, for, in the general distress caused by the revolution of that year, many persons carried their gold plate to the Mint to be converted into money; but the influence of the new mines is not perceptible till after 1850. During the period of eight years, ending the 31st December 1857, the gold coined at the Paris Mint amounted to 2 milliards 750 million francs (£110,000,000), or an average of 343 millions (£13,720,000) yearly.* During the period of forty-five years, comprised between the 7th Germinal, year 11, and the 1st January, 1848, it had only been 1 milliard 186 millions (£47,440,000), or 22,300,000 francs (£892,000) per annum. The greatest amount coined in one year was in 1857, when it reached 572,561,-225 francs (£22,902,449); and then we have for 1856 the sum of 508,281,995 francs (£20,331,279). In no other country does the coinage of gold attain these proportions, or anything like them. In England, where, properly speaking, gold alone constitutes the currency, the period of the last seven years, for which we have returns from January 1st, 1850, to the 31st December, 1856, presents only a total of £45,749,868 sterling, or an annual average of £6,535,605 sterling. This is a considerable increase upon the British coinage in the previous years; for, during the septennial period immediately preceding, the total of gold coined amounted to only £28,539,711 sterling, or a yearly average of £4,077,101; but the increase is far less than in France.

CHAPTER II.

diminished coinage of silver in france—gold is already at a discount in comparison with silver.

Whilst in France the coinage of gold takes this unexampled development, the like process with regard to silver is diminishing, and bids fair to cease altogether. In the period of forty-eight years, from the 18th Brumaire, year 8, to 1848, there had been coined 3,891,000,000 francs in silver (£155,640,000), or a yearly average of 81,065,000 francs (£3,242,600). During the eight years, terminating the 31st December, 1857, the coinage has only amounted to 323,660,000 francs, or a yearly average of 40,457,000 francs (£1,618,280).* It should, moreover, be observed that the coinage of silver during the latter years has only taken place in consequence of the great influence exerted in that respect by the government upon the directors of the mints. Left to themselves, they would not perhaps have struck a single five-franc piece since 1853.

Not only is much less silver money coined, but even that which the country possessed has been rapidly disappearing. The Custom House returns afford upon this subject only proximate indications, as the declarations are not always exact, though they nevertheless must be taken for authority. Formerly, France imported much more of silver commodities* than she exported. It appears from a report made in 1839 to a commission on the currency, over which M. Thénard presided, that during the period from the 1st January, 1816, to the 1st January, 1839, the excess of the importation of silver over the exportation amounted to 1,822,824,818 francs (£72,912,992). Nearly the same proportions were preserved until 1851, inclusively; but then commenced an inverse movement which gathered strength every year.

In 1852, the exportation surpassed the importation by 2,700,000 francs (£108,000). In 1853, the excess amounted to 117 millions (£4,680,000). It rose successively to 164 millions (£6,560,000) in 1854; to 197 millions (£7,880,000) in 1855; to 284 millions (£11,-360,000) in 1856; to 362 millions (£14,480,000) in 1857. From the 1st January, 1852, to the 1st January, 1858, the total excess of exportations over importations amounted to 1,127 millions (£45,080,000), which would be about two-fifths of the silver money possessed by France a few years since, according to the opinion of many persons.* There are not two ways, there is only one way of explaining these facts: gold is imported into France in masses, and takes the place in the circulation formerly filled by silver, which disappears, because it is profitable to come from abroad to barter gold for silver, on the footing of one kilogramme of the former for fifteen-and-a-half of the latter, the proportion established in the French currency,—for how long and under what qualifications, will be seen by referring to the law of 7 Germinal, year 11.

The merchant possessing ingots of gold has only to carry them to the Mint to obtain the same amount in pieces of ten francs or twenty francs, weight for weight, and fineness for fineness, save only the small charge to cover the expense of coining.* In this way every kilogramme of gold introduced into France, enters into the circulation on the footing, just described, of an equality with 15½ kilogrammes of silver. The creditor is obliged to take it in discharge of his claim on that basis.

From the very fact of the parallel circulation of gold and silver, on the footing of one of the former to fifteen-and-a-half of the latter, it is easy to withdraw the silver coins from circulation, and export them, giving gold in exchange. From the moment that numbers of persons devote their time and capital to the carrying out of this substitution, we must conclude that it is a profitable trade, for, if the relation of 1 to 15½ were not advantageous for the holders of gold, they would take good care not to carry on the operation upon the large scale on which they have proceeded.

To say that the exchange of a kilogramme of gold for 15½ kilogrammes of silver is a profitable transaction, is in other terms to prove that in the general market of Europe, or rather of the world, the relative value of gold and silver has undergone a change. Their relation is no longer that of 1 to 15½. Gold is no longer worth fifteen-and-a-half times its weight of the other metal. In the French market, silver is at this time at a premium; the bullion merchants will pay to those who bring them a certain quantity of coined silver, a certain sum beyond its legal equivalent in gold money, and the amount of the premium is the measure of the change which the relation of 1 to 15½ has undergone. This premium is a notorious fact; it is quoted every day; every morning the newspapers announce it. During the last two years, it has varied ordinarily between 20 and 30 francs per 1,000. Sometimes it has been lower, but it has also risen to 40 francs. 20, 30, and 40 per 1,000, is 2, 3, and 4 per cent.; such a difference, insignificant after all, has been sufficient to create the vast movement which has brought into France so much gold, and expelled by the reflux so great a mass of silver. It is a proof of the force with which the precious metals everywhere tend to find their level. The fact of gold being appreciated in France 2 per cent., or even less, is a sufficient reason why it should be precipitated upon the market of that country; on the contrary, let silver be depreciated to the same extent, and it will flow away with equal impetuosity.

Nor is there any ground for surprise at this kind of fluidity which characterises the two metals: the simple truth is they are commodities which in a small volume possess a great value, and which it is therefore easy to transport a great distance at very small expense.

CHAPTER III.

extraordinary exportation of silver from the civilised countries of the western world towards india and china —to what extent it is likely to continue.

It is not only to the fall of gold that we must attribute the divergence which has exhibited itself in the reciprocal value of gold and silver as regards the proportion of 15½ recognised,” under qualifications to be hereafter explained, in the law of the 7 Germinal, year 11. Undoubtedly, the enormous production of gold is in great part the cause of the phenomenon, but to a certain extent the origin may be found elsewhere. Simultaneously with the cause which has produced this divergence by lowering the value of gold, there is another, the activity of which cannot be denied, which raises that of silver. The value of silver rises at present, owing to the sudden demand for this metal for exportation to the remote East. According to the statements published by Mr. James Low, and derived from the books of the Peninsular and Oriental Steam Navigation Company, by whose agency nearly the whole of this precious freight is transported, the vessels of this company carried from England to Asia the sum of £12,118.-985, in silver, in 1856; and of £16,795,232 in 1857. In 1851 it was only £1,716,100. Besides, from the ports of the Mediterranean, there have been sent to the Levant and the remote East (India, China, and the adjacent regions), in 1856, £1,989,616; and in 1857, £3,350,689. This is for the year 1857 a total of £20,145,921, that is to say, of more than double the yield of all the silver mines that supply the markets of the Western World, I mean of Europe and America. This efflux of silver is independent of an exportation of probably one-tenth of the above amount in gold, which has been going on during the last few years. It is true that we ought to deduct from these exportations of silver to the East a certain quantity of imports, because, in these articles, alongside of the general stream there is always a certain counter-current. But we have reason to believe that for the last few years it has been but a limited sum; at any rate the amount is unknown to us.

To form a tolerably correct idea of the disturbance which the former relation of gold and silver has undergone, owing to the extraordinary demand for the second of these metals, it may not be amiss to recall to mind what have been in former times the exportations of silver from Europe and America to the Levant and the remote East.

From ancient times, the commerce of the civilised nations of the West with Asia, which passed by Suez, the Euphrates or the Black Sea, involved the transmission of a certain quantity of silver which the Europeans gave m exchange for the spices and perfumes which they received. According to Pliny,* the quantity of silver which took this direction amounted to 100 millions of sesterces, which, according to the tables prepared by Bureau de la Malle, in his Political Economy of the Romans,† was equal to two millions and a half of francs (£100,000), or rather less than 2,000,000 (£80,000), as estimated by Letronne. In our day the trade between Europe and remote Asia is greatly developed. The Europeans draw from India cotton manufactures and indigo; from China certain manufactures of silk, and also tea, the quantity of which has since acquired great proportions. More recently, other manufactures, such as those of Cashmere, and later still, some further articles, including sheeps' wool, have been derived from India; on its side China has engaged in furnishing Europe with an additional supply of raw silk.

At the commencement of the 19th century, Baron Humboldt estimated that the mass of silver sent annually from Europe and America into Asia, both by sea and the land route whichv passes through Southern Siberia and the North of China, including even that which remained in the Levant, that is to say, the Mussulman ports of the Mediterranean, amounted to 25 millions and a half of dollars,‡ or 612,000 kilogrammes of pure silver, or 137 million francs (£5,480,000), which was nearly three-fourths of the silver then yielded by the whole of the mines of America. But even for the epoch to which it refers, this valuation should be regarded as altogether fortuitous; and, as an average for any particular period, it, must be considered as greatly exaggerated.* More recently, Mr. Jacob has endeavoured to ascertain what the average drain of silver amounted to at the commencement of the century, by examining the valuable records of the East India Company, which then enjoyed the monopoly of the trade of Great Britain with India and China, and was moreover the medium through which the merchants of the United States remitted the precious metals to China, but not to India. This conscientious writer estimates, that by the principal channel, that is to say by the direct ocean navigation, Europe and America did not then export annually of the precious metals to India and China more than about 25 millions of francs (£1,000,000), and that even a very small part of this amount was in gold.† In admitting, without deduction, that the trade of the Levant, and that through Siberia, absorbed the sums indicated by Baron Humboldt, we should arrive at 70 millions of francs (£2,800,000), in lieu of 137 as the total at the commencement of the century.

After the first years of this century, notwithstanding the considerable extension which the peace soon gave to the commerce between the civilised regions of the West and Asia, the exportation of silver never increased to an extent to raise its value, for the merchants of the Western World had discovered other means of effecting their remittances. On this subject, all the authorities are unanimous. The official returns, published by Mr. Jacob, and the other information furnished by him, have led him to the conclusion that, from 1810 to 1830, the average exportation of the precious metals by sea, to Asia, both from Europe and America, did not exceed 50 millions of francs (£2,000,000), and it was less towards the end than at the commencement and middle of the period. It must, however, be remembered that of this amount a small portion consisted of gold. As respects the two other routes indicated by Baron Humboldt, that by land through Russia, and that by the Levant, including, in the latter, the silver which remained there, as well as the portion which reached the remote regions of Asia, Mr, Jacob observes that, at the period when he wrote, in 1831, it was no longer necessary to include in the estimate the amount of silver which flowed through those channels. The qraantity of silver wbicb passed from Russia into Asia, by Kiachta and Tobolsk, had fallen to nothing. The goods, chiefly woollen cloths, that Russia sold to the Chinese, were equal to the teas and other products which China sold to Russia, and it even left a small amount due to the Russian merchants, which the Chinese paid in silver. If, in their trade through Tiflis, the Russians were obliged to liquidate a certain balance with silver, it was an inconsiderable amount, and in any case it was, at least, compensated by the remittances which the Chinese made through Siberia.

As for the commerce of the Levant, or through the Levant, Mr. Jacob states that, at the time when he wrote, the exchanges of merchandise which were made by that route balanced one another.

Baron Humboldt himself, always ready to welcome the development of new facts, acknowledged in the second edition of his Political Essay on New Spain* published four years only before the work of Mr. Jacob, that the exportation of the precious metals to the destination of the Levant, of Hindostan, of China, and the adjacent regions, such as the Indian Archipelago, had considerably diminished, since the publication of the first edition of his work. He added, even, “It is now a generally received opinion, that Great Britain has created a reflux of gold and silver from the peninsula of India into Europe,”

Thus, towards 1830, the remittances in silver, which the civilised Western World had to make to the Asiatics, were far from being extensive; they were certainly much below 50 millions of francs (£2,000,000). More recently, the amount was still further diminished, not only because the merchandise of Europe and America found a greater vent in Asia, but, above all, because the importation of opium into China operated powerfully to change the balance of trade. The commercial delegates who accompanied the French embassy to China, in some publications, prepared with great care,* establish the fact that after 1830 China came to be a much larger exporter than importer of silver; and they give as their estimate for 1842 that China would have that year imported a million of dollars, or five millions and a half of francs (£220,000), and exported 11,160,000 dollars, or 60 millions of francs† (£2,400,000); they add that up to the time at which they wrote, that is to say subsequently to 1845, the commerce in opium alone had caused an exportation of silver from China, to the amount of about 20 millions of dollars, or 108 millions of francs (£4,320,000). Of late, the commerce with India and China has undergone great changes, or to speak more properly, a violent shock. The Chinese government, by prohibiting the importation of opium, has sought in vain to destroy the trade, or even to restrain it. The civil war which is convulsing a large part of the Chinese empire, by spreading disquiet and alarm, has caused a demand for the precious metals, because of all wealth they are the most easily concealed. In India, a formidable insurrection has threatened the British dominion, from which arose a disturbance in the exchanges between Europe and those vast possessions; and, besides, to meet the expenses, England has been obliged to despatch large quantities of silver to the seat of war. All these causes have operated in a manner to attract towards Asia a much larger proportion of silver than previously, and thus explain, to a certain extent, the unexampled increase which has during the last few years taken place in the exportation of silver from Europe and America into Asia.

The commercial relations of Europe and Asia have been, moreover, considerably modified by other circumstances. On the one hand, the bad harvests have compelled the people of Europe to resort to the East for rice; whilst on the other, the crop of silk having failed in France, Italy, and elsewhere, the silk manufacturers, so numerous in France, Switzerland, England, and Germany, have been obliged to resort for a much larger portion than heretofore of their raw material to China, where it is cultivated in great quantities; and we all know that silk is a very costly article.

It is under these influences that the exportation of silver from the nations of the West into Asia has experienced, since 1852 and 1853, the enormous augmentation mentioned above.

It must be borne in mind that the magnitude of the amount of silver absorbed annually by Asia, is of recent date; it is an unforeseen phenomenon which has abruptly presented itself, and one could not conscientiously take it for a fact definitely and unchangeably established; it would be exposing oneself too much to the risk of deception, to assume that the present will be the rule of the future.

If asked formally to express an opinion as to what is likely to be the future in this respect, I should decidedly withhold it even with reference to an early period; it seems to me that there are insurmountable difficulties in the way of making a rational prediction on the subject, so numerous, and, moreover, so fleeting and intangible, are the elements which it would be necessary to take into account.

Doubtless India will soon return again entirely under British rule; but will order be so speedily re-established, and will the exchanges with that country immediately resume their accustomed course? On this point it would be premature to predict anything. and then will it not be necessary to maintain there, at a great expense, a large European army, which may, and indeed must, necessitate heavy remittances of specie? Is it not also possible that India, restored to peace, and intersected with railroads, which were in active progress before the insurrection, may soon become a great storehouse, whence Europe may derive her cotton, the supply of which has been, up to this time, a monopoly in the hands of the United States? That would be a powerful cause for the continuance of the flow of silver from Europe to the East Indies. On the contrary, is there not ground for presuming that the numerous population of India may become so changed in their social habits, under the vigorous administration of Englishmen, as to accustom themselves to the consumption of the manufactures of Europe and the United States, which would dispense with the necessity of their sending the precious metals in payment for the raw materials which are furnished by India, and thus tend to restore the exchanges to nearly the state in which they were about the year 1845?

As respects China, there is room for similar observations, but in a sense the opposite of each other. China offers to Europe raw materials of great value, and, especially, as has been seen, silks in immense quantities, as well as that article which has taken so important a place in the alimentary habits of the two great Anglo-Saxon communities. The exportation of tea from China to England, and its numerous dependencies, and also to the United States, has only acquired its interesting proportions within the period of a century;* —but in our day it is very considerable, and is constantly increasing In return, the products of Western industry are trying to adapt themselves to the habits of the Chinese consumer: aided by a recourse to the various productions of India, will they be sufficient to balance the amount of the productions furnished by China to the Western world? When, one way or another, the civil war which now ravages the Celestial Empire shall have been brought to an end, and when the campaign undertaken by England and France to compel the Chinese government to renounce its system of isolation shall have succeeded, is it not credible that the 350 or 400 millions of industrious men, attached to the enjoyments of life, comprised in the Chinese provinces, will be inclined to adapt to their usages a multitude of commodities with which the trade of Europe and America can supply them? In assuming it to be probable that such will be the case, how long will it take to put this new state of things, this vast system of exchanges between China and the people of the “Western World, on such a footing that the productions bartered between the two parties shall balance, or nearly so, one another? On this subject we can only hazard conjectures. It is clear, however, that the actual state of the exchanges which is balanced by the annual remittance to Asia of from 400 to 500 millions of francs (from 16 to 20 millions sterling), by the Europeans and Americans, can only be regarded as accidental, and that it has not yet received that sanction from experience, without which the facts ought not to be made the grounds of conclusions by enlightened men, or of the calculations of governments.

CHAPTER IV.

france serves temporarily as a parachute to retard the fall of gold.

It is at first sight surprising that a production of gold so vast, so colossal as that which has been just described, in comparison with all that has been seen previous to our day, should not have produced a greater fall of gold relatively to the other precious metal. The surprise redoubles if we take into account the enormous increase that has taken place in the demand foT silver in the European market, or, more properly speaking, in the whole Western World, for exportation to the East. But here a powerful cause has intervened to retard temporarily the fall of gold. France is a market which has hitherto offered to the gold of the new mines an indefinite outlet, on the basis of one kilogramme against 15½ silver; for the foreigner who owes a Frenchman a certain number of francs, that is to say, a certain number of times 4½ grammes of silver, acquits himself legally in paying him the same number of times 29 centigrammes of gold, a quantity 15½ times smaller. As to the bullion merchant who wants to exchange his gold for silver, he obtains it on nearly the same terms, for, beyond the quantity indicated by the relation of 1 to 15 J, he has only to pay the premium, and of necessity up to this moment it has been but slight, and must continue so some time longer, for a reason easy to perceive. So long as much silver remains in France, persons residing there who may receive coins of this metal, will think themselves fortunate to exchange them for gold at a small premium beyond the relation established by the law of the 7 Germinal year 11, because in the payments which they have to make they could not compel their creditors to take them for more than the proportion of gold indicated by this law, viz., 1 against 15½.

Such is the actual effect of the provisions of the law of the 7 Germinal, year 11. We will not at present inquire whether the intention of the legislator was, that under the circumstances which now present themselves, this comparative value of gold and silver should be maintained;- it is a subject to be hereafter discussed. But the truth is, that so long as the provisions of the law of the year 11, on this point, are allowed to remain, and so long as France shall continue to offer great masses of silver, the merchant will find it easier to barter his gold in that country for the other metal, on terms which will deviate little from those prescribed in the year 11. It follows, also, whilst this state of things lasts, that it will be impossible, at London, Brussels, Hamburg, or even at New York, or any other great centre of commerce, for gold to fall much below 15½ times its weight in silver. It is from the same reason that if, at any moment, when the price of corn tended strongly to decline, a Paris merchant bought in the open market all the corn brought to him at 20 francs the hectolitre, it would be impossible that at the market of Saint Denis the quotation should greatly deviate from the same price. But the aspect of affairs will be very different from the day when the movement which at present attracts the silver of France, shall have led to the exportation from our territory of nearly all our five-franc pieces, and when, consequently, this money shall have become so rare as to render it impracticable, or even difficult to exchange a kilogramme of gold against 5½ kilogrammes of silver. From that moment the fall in gold will be rapid. In a word, if, down to the present time, the immense production, of which Australia and California have been the theatre, has not produced a greater fall in the value of gold, it is France which is the cause. It is she that has retarded the depreciation of gold. She plays, in relation to this metal, the part of a parachute, and she plays it at her own expense; she will understand it well when the great fall occurs; but then it will be too late.

That the premium on silver should have reached even 4 per cent., under the circumstances in which the trade in the precious metals is placed, seems to me to indicate the force with which gold tends towards a depreciation; and they who argue from the slightness of the premium, that there is little ground for anticipating any great future change, seem to me to fall into a singular error.

We know that what is now to be seen taking place in silver, occurred a few years previously in gold. Gold was at a premium in the French market; at the same time that the coinage of this metal had fallen to an insignificant sum, and the amount which had been in circulation in France was escaping abroad. The returns of the-Custom-House show that from the 1st January, 1816, to the 1st January, 1839, the exportation of gold exceeded the importation by 541,000,000 francs (£21,640,000), without counting that which travellers carried with them. During this period, the relative value of gold remained nearly fixed at 15¾ times that of silver, instead of the proportion of 15½, indicated by the law of the 7 Germinal, year 11. Now 15| in relation to 15½, represents only a deviation of 1½ percent.* Such a slight divergence from the legal proportion, sufficed, however, to cause the disappearance of gold from the circulation, and to lead to the exportation of the larger portion of it. This proves how small a difference suffices to effect the displacement of the precious metals.

CHAPTER V.

whether the extraordinary production of gold ought to be considered as an ephemeral accident.—the crushing of the quartz veins —mines in siberia and elsewhere.

The new gold mines, will they continue to be what they are? The abundance of metal, will it remain indefinitely the same, and will there be always the same facilities for working it”? To sum up in a word, will the production remain as great, or, like a meteor, will it dazzle for an instant, suddenly to disappear? On this subject, there might be room for a long controversy, of which the result must still be liable to some uncertainty, owing to the want of sufficiently precise and authentic information. However, we are warranted in saying that the continuance of a large production presents itself in the perspective, surrounded with a very great probability.

Eminent geologists, at the time when the first news of the marvels of California arrived, remarked, with truth, that the alluvial deposits in which gold is found, and on which to the present day nearly all the successful workings have been carried on, are liable to speedy exhaustion. They, on that occasion, reminded us that many countries have had, in the earlier period of their civilisation, mines of gold and silver, and that after a short time all remains of them disappeared, even to the extent of leaving no traces of their existence in the traditions of the inhabitants. Might not this be taken as a warning of the early exhaustion of the mines of California and Australia?

There are very striking calculations to be produced in an opposite sense. Supposing that the soils the most advantageously workable of these regions yield in gold the hundred-thousandth part of their weight,* it would be necessary, for obtaining one kilogramme of metal, to wash 50 cubic metres of gravel or sand. It follows that, supposing an auriferous bed to be of the thickness of a metre (about 39 inches), then a hectare (about 2½ acres) will have heen exhausted with the extraction of 200 kilogrammes, and that thus an annual extraction of 120,000 kilogrammes of fine gold, which, on the hasis estahlished hy the law of the year 11, would he equal to 400 millions of francs in gold coins (£16,000,000), would exhaust 600 hectares; and 60,000 hectares would he sufficient for an extraction, at this rate, of a century. Now 60,000 hectares are only half the area of one French department,— a very small space in comparison with the total superficies of countries so vast as Australia and California. The conditions in which the deposits of ore are found in California and Australia are such thart it is not a very sanguine view to suppose that in each of these countries alluvial ground will he found, equal to 60,000 hectares of deposits of a metre in thickness, and of the richness of 1 to 100,-000. There are several ways in which such a field of operations may be arrived at, for it must he borne in mind that frequently these auriferous banks are much more than a metre in thickness; nor must it be forgotten that their richness may greatly exceed that of 1 to 100,000. In fact this return is not the minimum below which the extraction would necessarily cease to be profitable; it is very far from it. There have been worked, and are now being worked, in all the auriferous regions, some banks, the produce of which is not one-fifth or one-sixth as much as the above.

It will be readily conceived, after the considerations I have submitted to the reader, that we should soon exhaust the deposits-in those countries where the auriferous ground was very limited in extent, and was only met with in the bottoms of valleys. But that is not the case in California, or Australia. The golden alluvions are there spread over a far wider space; they are found not only on the banks of rivers, and in their beds, but are scattered over the surface of vast plains.

It has been seen also that hitherto the miners of Australia and California have confined themselves to the more tempting deposits, that they have been skimming the cream, and that henceforth they must expect their work to be much less productive. There is, undoubtedly, some truth in this observation. But then it must also be remembered that they have not yet explored the whole surface, and that there is reason to believe that, in California and Australia, there are many rich and extensive deposits still to discover; indeed, they are constantly in the course of discovery. It may also be urged that, if the natural facilities for extraction do not remain unimpaired, the processes of working may be so improved as to compensate, in some degree, for the diminished fertility of the mines; and this improvement is not something appertaining to the remote future; it is a fact which is realised every day. The report of Dr. Trask shows a marked increase in the productive force of the miner between 1852 and 1854. On the contrary, in Australia, in the colony of Victoria, the most important of all the mining districts, the commission which presented the report already referred to describes the deposits as declining in richness continually from 1852 to 1854; but, at the same time, it reckoned on the improved processes of extraction for compensating to some extent the impoverishment of the mines, even if the falling off were to be permanent, which is doubtful; subsequently to this report, that is to say in 1855 and 1856, the results of the workings appear to have improved in Australia.

It is a fact, however, upon which there is now hardly room to doubt, that the miners will no longer confine themselves to the washing of the metal from the alluvions where nature had deposited it, after having herself pulverised and ground the rocky mass in which it had been imprisoned. In California and Australia, but especially the former of these countries, the industry of man, armed with a powerful instrument, does not fear to attack the veins of quartz which conceal, in scattered grains, the precious metal. The alluvions themselves are worked with more intelligence and a better organisation of labour than heretofore. Companies, more or less powerful, have constructed or are constructing canals to bring the water required for washing the auriferous earth. A better division of labour has been established among the mining population, and, in fine, the utensils and the processes of washing are greatly improved.

If it were necessary to sum up with the expression of an opinion on the future of Australia and California, I should say, that, even if it were admitted to be quite improbable that the production of the precious metal which has been maintained to our day should be permanent, or, to repeat the same thing in other words, that the average yield of a day's labour should be undiminished, it is difficult not to admit our belief that the mines of these two countries must, for yet a long series of years, produce gold in such quantities and on such conditions as to render a marked decline in its value inevitable. This is exactly as if we said that in all those countries where, as in England, gold is unquestionably the monetary standard, as well ab in those where, as in France, it is left in possession of this attribute, there is ground for predicting a progressive rise in the price of articles of subsistence and raw materials. The price of manufactures would rise in the same proportion, if the improvements hi machinery, much more easily effected in manufacturing than in agricultural processes, did not partially or completely counteract this rising tendency.

In the preceding statement I have hardly alluded to the gold mines of Russia, the production of which has hitherto remained considerably below that of the mines of Australia and California, although in one year they have yielded 30,000 kilogrammes, or upwards of 100 millions of francs (£4,000,000). The two following facts, however, ought not to be lost sight of:—1st. The auriferous deposits of the Northern and Eastern regions of the Russian Empire are literally of a gigantic extent; from all the information we at present possess they would appear to be even the largest in the world. 2ndly. In richness —by which I mean the quantity of gold contained in a cubic metre of the sand or gravel composing the beds of the auriferous alluvions—they are hardly surpassed by those of Australia and California.

The mines of Siberia have had this advantage, that eminent scientific men have made them the subject of their most serious study, having, for that purpose, personally visited those regions. At the request of the Emperor Nicholas, Baron Humboldt himself made in 1829, in company with some very distinguished savans, a long journey in the countries through which extend the chains of the Oural and Altai mountains, and from that time he has carefully collected and condensed all the information that has transpired respecting this quarter of the world; and hence sprung his work upon Central Asia, published in 1843. Towards this latter period an English geologist of deserved celebrity, Sir Roderick Murchison, explored a portion of the gold mines of Russia, the results of which he has published.*

For a series of years the Russian government has been careful to make Europe directly acquainted with all that passes in these auriferous regions. A special publication, which has been for some years suspended, l'Annuaire desMines de Riussie, contained periodically on this subject some reports and memoirs of very great interest. We thus know that the region occupied by the chain of the Oural, which is that to which for the first years the mining operations were confined, offered an immense field for the industry of man, for this chain is not less than 1,900 kilometres (about 1,200 miles) in length; but to the East of the Oural, in Siberia, the gold regions expand to prodigious dimensions. From the Kamschatka and the Ouskoi mountains, the foot of which is washed by the Pacific Ocean, as far as the meridian of Perm, to the West of the Oural, over a distance which embraces the half of a circle which would be described in making the circuit of the globe on those latitudes, the auriferous deposits are distributed in numerous groups and over a large surface, and the zone over which they are spread is of an average width of 900 kilometres (about 550 miles). Baron Humboldt has remarked that the presence of gold over this immense surface is one of the phenomena the most general to be found on the globe. Moreover, the richness of these auriferous alluvions is very decidedly superior to that of those found in the Oural.

With the new and improved spirit displayed by the Russian administration since the accession of the present Emperor, and with the more active impulse given to industry in this vast Empire, we may reasonably expect that the production of gold in Northern Russia will henceforth experience a large increase. The Emperor Nicholas, in 1849, (edict of the 14th-26th April), raised an obstacle to the development of the mining operations of Siberia. He subjected them to a progressive tax, which for the larger undertakings, those which returned upwards of 40 poods of metal (655 kilogrammes or 2,170,000 francs, £86,800), amounted to 30 or 35 per cent, on the gross produce, independent of the special tax for police purposes: for the great undertakings, this was 9 to 10 roubles (36 to 40 francs—30s. to 33s. 4d.) the pound of metal of the Mint standard. Such heavy charges could not fail to limit the extraction. Previously the State levied on private enterprise a tax of 15 per cent., independently of a rate for the police, and which was sufficiently heavy; these regulations are still in force in the mining districts of the Oural.

This is not the place to inquire whether the government of the Emperor Nicholas had good reasons for increasing to this extent the amount of taxation imposed upon the miners of Siberia. At the period when the duty of from 30 to 35 per cent, was established, there might have been good arguments to justify it. But with the competition which the mining operations of California and Australia offer to those of Siberia, these high duties cannot be sustained. It is the interest of Russia to bring her gold to market before the fall assumes a more decided character, for she will otherwise incur a loss by retarding the production of the metal.

It is not out of place here to allude to some contingencies which, in addition to the production of new gold, may cause an increased quantity to flow towards the Christian nations. There is one among others of which I may say that it is not altogether without probability; I allude to the breaking down of the barrier of exclusive-ness, which has hitherto completely shut out the nations of the West from the Empire of Japan. The tendency of events passing in the remote east, the direct steps that have been taken by the American and Russian squadrons with the Japanese government, and the treaties concluded in consequence of these visits, not only with Russia and the United States, but also with Holland, all presage for an early period the establishment of important relations between the Japanese Archipelago and the Christian world. Now, the information we already possess relative to Japan, leaves no room to doubt that gold is there at a comparatively low price; persons go so far as to say that the relation between gold and silver in Japan is hardly above that of 1 to 3. Such is, for instance, the statement in a letter, dated the 6th July, 1857, addressed by the Consul of the United States, at Simoda, Mr. Townsend Harris, to his colleague at Hong Kong. He there very expressly states that the relation between gold and silver is only as 1 to 3 1/7. The sole object of the letter is to bring the fact to the knowledge of the Americans who trade with China, in order that they may profit by it, so that, from this moment, they possess the faculty of doing so. Can there be a doubt, then, that there will soon be an exportation of a large portion of the gold to be found in Japan? It is well, however, to add that the quantity of this gold is not known, and that probably it is not very considerable.

It is not irrelevant here to add that a Mexican province, which is supposed to conceal very rich mines of gold, comparable to the deposits of California itself, that of Sonora, appears destined to share the same fate as California, of which it is the neighbour, by falling into the hands of the United States. There are many indications which warrant the belief that this event is not distant. If it were to occur, and if, moreover, the mines of Sonora were to justify the reputation they have acquired with very enlightened travellers, whose testimony has been favourably quoted by Baron Humboldt himself,* we might expect à considerable force added to the effects produced by California and Australia; for the inhabitants of the United States would not display less energy and enterprise there than they have already exhibited in the valleys of the Sacramento and the San Joaquim.

Under circumstances similar to those which I have rapidly enumerated, the only way to prevent a fall in the value of gold, and a consequent rise in the price of commodities, would be the discovery of a new demand, equal in extent to the increased supply thrown upon the markets of the Western World. Thus only, the relation of supply and demand remaining the same, would people be able to procure the precious metal on the same conditions as at present, that is, they would be obliged to give in exchange the same quantity of com or labour. Is the opening of such an outlet possible or probable? Let us investigate the subject.

[*]The word Western is here used in contradistinction to the extreme East, which consists of remote Asia, and especially of India and the Empires of China and Japan.

[†]I prefer using kilogrammes of fine gold rather than francs in the statement of accounts. Fewer figures will be required, and they will be more easily compared with one another. The kilogramme of gold, by the terms of the law 7 Germinal, year 11, is equal to 3,444 francs 44 cents (£138).

[*]Essay on New Spain, Vol. 3, p. 456; edition of 1827.

[*]See page 80 of the Report of M. Trask.

[*]Report of the Commission appointed by the governor of the province of Victoria to report on the state of the mines. This report is comprised in the Blue Book, entitled—Further Papers relative to the Discovery of Gold in, Australia. February, 1856.

[†]According to a curious memoir by the engineer of mines, Daubrée, which goes back for a few years, the washing of the auriferous sands of the Rhine is a branch of industry which still subsists, although for a long time it has only been carried on upon a small scale. The production amounts yearly to from 12 to 15 kilogrammes (£1,600 to £2,000).

[‡]The hypothesis here indicated, according to which the price of a day's work, in Australia and California, should finally fall to a sum representing in food and other enjoyments that which is procurable among civilized people in temperate regions for the sum of five francs in our day, seems reasonable. California and Australia are healthy countries, where the European race can labour, and where food ought to be, if it is not already, at a moderate price, either from the abundant production of the soil, or from the facilities for importation by sea. Doubtless, if the number of hands remained as insufficient as at present, the wages of manual labour would remain very high; but we know with what facility emigrants can be transported to the most remote regions, and new and more economical means of conveyance are now being organised between Europe and Australia, as well as between the eastern shores of America and California.

[*]The coining of gold was only continued for eleven years of this reign. It did not commence till after the promulgation of the law of 7 Germinal, year 11.

[*]It may Dot be useless to know from year to year the progress of the coinage of gold in France during this period. It is as follows —

1858, during the first six months, £9,483,250.

[*]The following are the details, year by year:—

[*]That which here, and in the returns of the Customs, is named silver commodities, comprises both ingots and coins.

[*]The following is a table of the importations and exportations of silver since 1846.

[*]The charge is 6 francs, 70 centimes (5s. 7d.) per kilogramme of coined gold, making 3,100 francs (£124.)

[*]Natural History, Book XII, Chap. XVIII.

[†]At the end of the 1st volume.

[‡]As follows.—

(Humboldt.—Essay on New Spain, Vol. III., p. 413. 2nd edition.

[*]We are warranted in concluding, from the language of M. Humboldt himself, in the second edition of the Essay on New Spain, published in 1827, that, with his proverbial truthfulness, he has since discovered that the above estimate was excessive, even for the first years of this century

[†]An Historical Inquiry into the Production and Consumption of the Precious Metals, Vol. II., Chapter XXIV., p. 196.

[*]New Spain, edition of 1827, Vol. III., p. 473.

[*]See these documents in the Annales du Commerce Exterieur, a collection issuing from the department of commerce: they are to be found under the head of China and Indo-China, Commercial Facts, Nos. 13 to 20, particularly No. 13. Consult especially page 19.

[†]Page 18 of No. 13, as above.

[*]The quantity of tea sold by the East India Company did not exceed a million of kilogrammes (2,200,000 lbs.) until about 1750. From 1748 to 1759, the average annual sales of the Company were 2,558,081 lbs. It is true that the Dutch and other nations also imported some tea from China. Of the above 2,558,081 lbs., a certain portion was exported, which so far reduced the amount retained for consumption at home. At present the quantity consumed in the United Kingdom amounts to 63,295,643 lbs. The 23rd volume of the large statistical work of Mr. John Mac.Gregor contains, on the history of the trade in tea, a chapter full of interesting details, to which the reader is referred (page 292). The Annals of Foreign Trade (No. 983 of the 3rd series of the Miscellaneous Intelligence, China, and Indo-China, Commercial Facts, No. 24,) estimates at 169,443,786 lbs. the total exportation of tea from China in 1855.

[*]In this interval, the value of gold never rose above 15 80/100 or 15 81/100, excepting during a part of 1829, and the four following years, 1830–1–2–3. It may be concluded, at least for the last four years, that the agitations in France were the cause of this rise. In times of alarm, there is usually an extraordinary demand for gold, owing to the facility with which it can be concealed.

[*]This is the quality or rather the yield (which is very different when worked in an inferior manner) of the rich fields of production in Siberia. In the Oural mountains they wash with success sands which contain only a fourth or a fifth of the above proportion, that is to say, one kilogramme in 400,000 or 500,000. In the valley of the Rhine, the most favoured spots, those which the gold-washers hunt for, and on which they concentrate all their efforts, contain only 1 kilogramme in 7 millions. According to various accounts, the yield of good soils in California and Australia is often as much as 1 in 100,000.

[*]The reader is referred to an address delivered to the Geographical Society of London, the 27th of May, 1844, by Sir Roderick Murchison, then President of the Society.—(Address to the Anniversary Meeting of the Royal Geographical Society.)

[*]Essay on New Spain, Vol. II., p. 240. See also the work of M. Saint Clair Duport,—Production des Métaux Précieux au Mexique, p. 202; and that of M. Duflot de Mofras,—Exploration du Territoire de l'Oregon, des Californies, et de la mer vermeille pendant les années 1840, 1841, and 1842. Volume I., p. 206 to 212.